Hemp and Marijuana go to war

Hemp and Marijuana go to war

The farm bill has pitted the allies against each other over how to handle intoxicating products.

A farm bill battle is pitting hemp against its closest cousin: marijuana.

The fight centers on intoxicating hemp products, which have developed into a multi-billion-dollar industry subject to few rules and regulations.

Some marijuana companies and trade groups are pushing Congress to close a loophole that allows the production and sale of intoxicating substances derived from legal hemp. The hemp industry has a very different ask for lawmakers: leave the federal definition of hemp unchanged.

“This will probably be one of the more interesting debates and discussions in the farm bill,” House Agriculture Chair G.T. Thompson (R-Penn.) told POLITICO earlier this month.

It’s the culmination of similar fights happening in state houses around the country, as the nation tries to navigate a completely new industry rife with legal complexities created by distinctly different federal laws for marijuana and hemp.

The loophole originated in 2018 when the last farm bill legalized hemp — or cannabis with less than 0.3 percent THC, the principal psychoactive component of the plant. Cannabis with more than 0.3 percent THC, meanwhile, is considered marijuana and remains federally illegal. Many lawmakers who backed hemp legalization six years ago did not realize they were approving an intoxicating substance.

“I supported the last farm bill and I was okay with hemp being used for industrial use and things like that,” said Rep. Doug LaMalfa, a Republican lawmaker from Northern California who speaks out regularly about the impact illicit cannabis cultivation has on his district. “I watched what happened after that, and a whole bunch of people got, I think, kind of hornswoggled.”

Capitol Hill is not first to this debate: Connecticut already moved to restrict intoxicating hemp products, Louisiana may vote this week on a bill to outright ban hemp products with any amount of THC, and Missouri’s Attorney General launched an investigation last month into intoxicating hemp products.

On Capitol Hill, the main question – with a House markup of the farm bill looming on Thursday – is whether House Agriculture Committee Republicans have enough support in their own caucus to bring an amendment that would either put more guardrails around hemp products or prohibit them from having any amount of THC.

Rep. Randy Feenstra (R-Iowa), told POLITICO last week they are “on the path of closing the loophole,” but Reps. Dusty Johnson and David Rouzer both declined to talk about a potential amendment addressing the issue as of last Thursday. LaMalfa, a strong supporter of closing the loophole, was not even sure as of last Wednesday which lawmaker – if any – would be introducing the amendment.

“I’d be very inclined to carry or support a refinement of that,” LaMalfa said.

Kentucky Republicans Rep. Jim Comer and Mitch McConnell took the lead on legalizing hemp. McConnell has remained a champion of industrial hemp products — proudly sporting a hemp-fiber mask during the early days of the COVID-19 pandemic.

“By recognizing the difference in statute between hemp and its illicit cousin, we can remove much of the confusion facing farmers, producers and state agencies,” McConnell said on the floor of the Senate in 2018 when he introduced hemp legalization legislation.

McConnell’s office declined to comment for this story.

The opposite, however, has happened. Post-legalization, the market for hemp rope, fabric and other non-ingestible products was slow to develop. Even sales of CBD products were stymied by a lack of federal regulations, leading many national retailers to steer clear of those products.

Eventually, intoxicating hemp derivatives such as Delta-8 THC and Delta-10 THC became popular. Hemp companies also found it was possible to get enough Delta-9 THC into a beverage or edible to have psychoactive effects, without breaking the guidelines of the 2018 farm bill.

Intoxicating products, while a boon to the hemp industry’s economic outlook, challenged struggling state-legal marijuana industries. The cheaper cost and greater availability of intoxicating hemp-infused products made them a potent rival of the cannabis industry in many states.

Hemp products are not subject to the same stringent regulations and high taxes as marijuana products in many states where both are legal. And as they’ve grown in popularity, they’ve also garnered greater scrutiny from anti-drug and family groups, who raise concerns about intoxicating products getting into the hands of kids.

“FDA’s refusal to issue regulations on CBD products has effectively turned hemp and cannabis companies against each other when we should be working towards the same purpose,” said Jim Higdon, the co-founder of Cornbread Hemp, a Kentucky-based hemp company.

The U.S. Cannabis Council, whose members include many of the country’s largest marijuana companies, sent a letter to key lawmakers last month warning of a “national crisis” if lawmakers don’t crack down on intoxicating hemp products. The Midwest Hemp Council sent its own letter to Congress warning of dire consequences for farmers if the definition of hemp is altered in the farm bill.

Now, conservative Republicans and some cannabis companies are ironic bedfellows on Capitol Hill, both wanting the loophole closed for very different reasons. LaMalfa, for example, tells POLITICO he hates cannabis — and yet in this case, he has the same policy position as many state-legal marijuana companies.

Hemp groups are asking for a third approach: More regulations like testing and limiting purchases to consumers over 21, but the loophole stays open.

“There are certain ways of going about it that could shut down the whole industry [and] there are others that would only shut down parts of the industry”, said U.S. Hemp Roundtable’s General Counsel Jonathan Miller, adding that none of the proposals he’s heard of on Capitol Hill are acceptable. “The toothpaste is out of the tube,” he added.

Even the cannabis industry is divided on whether to close the loophole. Curaleaf, America’s largest cannabis company in terms of revenue, is launching a line of beverages with a low — but intoxicating for most people — amount of Delta-9 THC. Curaleaf CEO Boris Jordan told POLITICO the beverages will have no more than 5 MG of THC, and are made fully within the guidelines of the farm bill. Curaleaf is a member of USCC but does not align with the trade group on closing the loophole.

“We would prefer that it’d be one regulatory framework for all cannabinoids,” Jordan said. “We’re at that point in time right now with the hemp industry where there needs to be some rules put around what you can and can’t put into these products.”

Cody Stross, founder and CEO of Humboldt County cannabis brand Northern Emeralds, doesn’t want the entire loophole closed. Northern Emeralds sells marijuana products in California but is also entering into a licensing deal that will allow a hemp-based dispensary to open under their brand name in Austin, Texas, where marijuana products are not legal.

Stross thinks California should strongly regulate intoxicating hemp products that are sold in the state. He does not, however, support federal regulations that could limit intoxicating hemp products in states where marijuana is not legal, or that could restrict the ability of California producers to cultivate and export hemp out of the state to places like Texas.

“Everyone’s talking about this as though it was a mistake that needs to be corrected,” Stross said. “I think it was a mistake that was correct.”

It’s an opinion shared by Oregon Sen. Ron Wyden (D). While not on the Senate Agriculture Committee, Wyden is a senior member of the Senate who represents a state with large hemp and cannabis industries. That means his opinion on this carries weight.

Wyden wants more regulation from the FDA on things like packaging and age limits, his office shared with POLITICO. He does not support closing the loophole and says it would be a step backward into criminalization.

“If we’ve learned one lesson from the failed war on drugs,” Wyden said, “recriminalizing these products won’t make communities safer or keep the products out of the hands of kids.”

As the House Agriculture Committee prepares for its Thursday markup, lawmakers are still mulling whether or not to introduce an amendment that would close this loophole — and exactly how far that amendment would go. A deciding factor could be support from fellow Republicans, some of whom have already come out against it.

“I don’t think the federal government should be involved in this discussion,” Rep. Derrick Van Orden (R-Wis.) told POLITICO last week.

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